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100% TAX DEDUCTIBLE BENEFITS FOR THE SOLE PROPRIETOR
SECTION 105 OF THE INTERNAL REVENUE CODE
NOW SMALL BUSINESSES CAN REALIZE THE SAME TAX ADVANTAGES AS CORPORATE BUSINESSES WITH BIZPLAN.
It is a common fact that small business owners do not realize some of the same tax advantages as corporate employers. They miss out on considerable savings with respect to the treatment of health costs. BizPlan offers a means self-employed individuals to deduct 100% of their health costs, given they qualify.
BIZPLAN WILL SIGNIFICANTLY REDUCE YOUR FEDERAL INCOME TAXES, SELF-EMPLOYEMENT TAXES AND STATE TAXES.
By simply using BizPlan, a self-employed business owner may offer an employed spouse medical reimbursement package. The reimbursement package covers any costs incurred by the employee and any family members (including the employer him/herself). The end result is a 100% deduction for the employer’s family’s medical costs. When using BizPlan, your tax professional should be consulted to ensure compliance with the proper filing of various tax forms.
To reach the BizPlan Sales Department call: 1-801-261-1040
WHAT IS BIZPLAN?
BizPlan is based on section 105 of the Internal Revenue code, Revenue Ruling 71-588 and is supported by Letter Ruling 9409006. BizPlan provides a system that simplifies the compliance and administrative procedures associated with this type of medical reimbursement plan. With BizPlan, the Sole Proprietor may take advantage of 100% tax deductibility of medical expenses including:
- Health Insurance Premiums
- “Qualified” Long Term Care Policies
- Uninsured Medical, Dental and Vision Care Expenses
Other Deductible Benefits Available:
- Term Life ($50,000 max.) and Disability Income
- Benefits for Other Employees
BizPlan is not insurance. Participation in BizPlan is not dependant on purchasing additional insurance coverage or changing existing coverage. BizPlan will assist in providing the tax professional with an accurate itemization of medical, dental, and other deductible expenses.
HERE IS HOW BIZ PLAN WORKS.
Jim owns his own business. Jim’s wife Mary provides a valuable service to the business by keeping the books, typing and filing. Jim decides to formally employ Mary and take advantage of the BizPlan tax savings. When establishing a compensation package for Mary, Jim evaluates her experience and the vital role she plays in the business. Jim agrees to compensate Mary $10,000 per year. He pays the compensation as shown below.
REIMBERSEMENT OF
$4,000
+$3,000
$3,000
$10,000
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A Family Health Insurance Premiums (Fully deductible to the business, non-taxable to Mary)
B Family Non-Insured Medical Expenses (Deductible and non-taxable)
W-2 WAGES
The $7,000 of reimbursed medical costs may now be deducted at 100 percent as an employee benefit expense. Jim multiplies the $7,000 by a 15% federal tax, a 5% state tax and a 15.3% self-employment tax. The result: Mary’s compensation in benefits and wages has resulted in a tax savings of $2,450 this year!
$7,000 (A+B) Employee Benefit Expense
X .35 Multiply by total of Federal, State, and SE Tax
$2,450 Tax Savings
TAX SAVINGS WORKSHEET
STEP 1: ADD THE FOLLOWING TOGETHER
Family Medical Insurance _________________________________________
Family Medical Expenses _________________________________________
Total Deductible Expenses (A) _____________________________________
STEP 2: DETERMINE YOUR MULTIPLIER
If your taxable income is: Your Federal Tax is: Multiplier is:
0-14,000 10% .30
14,001-56,800 15% .35
56,801-114,650 25% .45
114,651-174,700 28% .48
174,701-311,950 33% .53
311,951+ 35% .55
STEP 3: DETERMINE TOTAL TAX SAVINGS
__________________________x________________________=______________________
Enter Number From A Your Multiplier Total Tax Savings
This illustration assumes an average state tax rate of 4% and a FICA rate of 15.3% when calculating your multiplier. Actual savings may vary.
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